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Guess? (GES) Q2 Earnings Lag Estimates, Revenues Grow Y/Y
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Guess? Inc. (GES - Free Report) reported second-quarter fiscal 2023 results, wherein the bottom line declined year over year and fell short of the Zacks Consensus Estimate. Meanwhile, the top line increased year over year and exceeded the consensus mark.
Results in Detail
Guess? posted adjusted earnings of 39 cents per share, down 59.4% from the 96 cents reported in the year-ago quarter. Earnings in the quarter were hurt by a negative impact of currency translations, partly compensated by a favorable impact of its share buybacks. The bottom line missed the Zacks Consensus Estimate of 41 cents per share.
Net revenues amounted to $642.7 million, which surpassed the consensus mark of $630 million. The metric rose 2% from the figure reported in the year-ago period. On a constant-currency (cc) basis, net revenues increased 12%.
The company’s gross margin contracted to 42.1% from the 46.8% reported in the year-ago quarter. As a percentage of sales, adjusted SG&A expenses escalated to 33.4% from 32.7% at the prior-year quarter’s level.
In the second quarter of fiscal 2023, adjusted earnings from operations declined 37.1% to $55.7 million. The adjusted operating margin came in at 8.7%, down from the 14.1% reported in the year-ago quarter, due to a margin decline across businesses, partly made up by efficient cost management.
Segment Performance
Revenues in the Americas Retail segment fell 2% year over year on a reported basis and at cc. Retail comp sales (including e-commerce) dipped 6% on a reported basis and 5% at cc. The segmental operating margin came in at 13.2% compared with 20.4% in the year-ago quarter.
Revenues in the Americas Wholesale unit climbed 1% (up 2% at cc) year over year. The segmental operating margin came in at 22.8% compared with 26% in the year-ago quarter.
The Europe segment’s revenues rose 4% (up 21% at cc) year over year. Retail comp sales (including e-commerce) fell 4% (up 10% at cc). The segmental operating margin came in at 10.3% compared with 15.9% in the year-ago quarter.
Asia revenues inched up 3% (up 15% at cc) year over year. Retail comp sales (including e-commerce) fell 2% (up 10% at cc).
Licensing revenues rose 13% (same at cc) year over year. The operating margin came in at 85.6% compared with 91.9% in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company exited the quarter with cash and cash equivalents of $174.4 million and long-term debt and finance lease obligations of almost $99.3 million. Stockholders’ equity was $410.8 million. Net cash used by operating activities for the six months ended Jul 30, 2022 amounted to $1,502 million.
GES declared a quarterly dividend of 22.5 cents, payable on Sep 24, 2022, to shareholders on record as of Sep 7.
During the second quarter of fiscal 2023, the company repurchased nearly 9 million shares for $186.7 million. With this, the company concluded its accelerated share repurchase plan of $175 million.
Guidance
For the third quarter of fiscal 2023, management expects revenues to decline 4.5% (up 4.5% at cc) year over year. The operating margin is likely to be 8.1% in the third quarter. Adjusted earnings per share (EPS) are envisioned at 55 cents.
For fiscal 2023, Guess? anticipates revenues to grow by roughly 1.5% (up 9.5% at cc) year over year. The adjusted operating margin is now likely to come at 10% in fiscal 2023. Earlier, the company expected an operating margin of nearly 10.3% in fiscal 2023. Management expects adjusted EPS of $2.65.
3 Hot Stocks
Here we have highlighted three better-ranked stocks, namely BJ's Wholesale Club (BJ - Free Report) , Prestige Consumer Healthcare (PBH - Free Report) and Snap-on Incorporated (SNA - Free Report) .
BJ's Wholesale, a warehouse club operator, currently sports a Zacks Rank #1 (Strong Buy). BJ has an expected EPS growth rate of 9.3% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BJ's Wholesale’s current financial-year revenues and EPS suggests growth of 14.3% and 9.5%, respectively, from the year-ago reported figure. BJ's Wholesale has a trailing four-quarter earnings surprise of 16.5%, on average.
Prestige Consumer, which develops, manufactures, markets, distributes and sells over-the-counter health and personal care products, carries a Zacks Rank #2 (Buy). PBH has an expected EPS growth rate of 8% for three to five years.
The Zacks Consensus Estimate for Prestige Consumer’s current financial-year sales and EPS suggests growth of 3.5% and 3.7%, respectively, from the year-ago period. PBH has a trailing four-quarter earnings surprise of 5.6%, on average.
Snap-on manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions. The stock currently carries a Zacks Rank #2. SNA has an expected EPS growth rate of 7.8% for three to five years.
The Zacks Consensus Estimate for Snap-on’s current financial-year revenues and EPS suggests growth of 4.7% and 8.2%, respectively, from the year-ago reported figure. SNA has a trailing four-quarter earnings surprise of 8.9%, on average.
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Guess? (GES) Q2 Earnings Lag Estimates, Revenues Grow Y/Y
Guess? Inc. (GES - Free Report) reported second-quarter fiscal 2023 results, wherein the bottom line declined year over year and fell short of the Zacks Consensus Estimate. Meanwhile, the top line increased year over year and exceeded the consensus mark.
Results in Detail
Guess? posted adjusted earnings of 39 cents per share, down 59.4% from the 96 cents reported in the year-ago quarter. Earnings in the quarter were hurt by a negative impact of currency translations, partly compensated by a favorable impact of its share buybacks. The bottom line missed the Zacks Consensus Estimate of 41 cents per share.
Guess, Inc. Price, Consensus and EPS Surprise
Guess, Inc. price-consensus-eps-surprise-chart | Guess, Inc. Quote
Net revenues amounted to $642.7 million, which surpassed the consensus mark of $630 million. The metric rose 2% from the figure reported in the year-ago period. On a constant-currency (cc) basis, net revenues increased 12%.
The company’s gross margin contracted to 42.1% from the 46.8% reported in the year-ago quarter. As a percentage of sales, adjusted SG&A expenses escalated to 33.4% from 32.7% at the prior-year quarter’s level.
In the second quarter of fiscal 2023, adjusted earnings from operations declined 37.1% to $55.7 million. The adjusted operating margin came in at 8.7%, down from the 14.1% reported in the year-ago quarter, due to a margin decline across businesses, partly made up by efficient cost management.
Segment Performance
Revenues in the Americas Retail segment fell 2% year over year on a reported basis and at cc. Retail comp sales (including e-commerce) dipped 6% on a reported basis and 5% at cc. The segmental operating margin came in at 13.2% compared with 20.4% in the year-ago quarter.
Revenues in the Americas Wholesale unit climbed 1% (up 2% at cc) year over year. The segmental operating margin came in at 22.8% compared with 26% in the year-ago quarter.
The Europe segment’s revenues rose 4% (up 21% at cc) year over year. Retail comp sales (including e-commerce) fell 4% (up 10% at cc). The segmental operating margin came in at 10.3% compared with 15.9% in the year-ago quarter.
Asia revenues inched up 3% (up 15% at cc) year over year. Retail comp sales (including e-commerce) fell 2% (up 10% at cc).
Licensing revenues rose 13% (same at cc) year over year. The operating margin came in at 85.6% compared with 91.9% in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company exited the quarter with cash and cash equivalents of $174.4 million and long-term debt and finance lease obligations of almost $99.3 million. Stockholders’ equity was $410.8 million. Net cash used by operating activities for the six months ended Jul 30, 2022 amounted to $1,502 million.
GES declared a quarterly dividend of 22.5 cents, payable on Sep 24, 2022, to shareholders on record as of Sep 7.
During the second quarter of fiscal 2023, the company repurchased nearly 9 million shares for $186.7 million. With this, the company concluded its accelerated share repurchase plan of $175 million.
Guidance
For the third quarter of fiscal 2023, management expects revenues to decline 4.5% (up 4.5% at cc) year over year. The operating margin is likely to be 8.1% in the third quarter. Adjusted earnings per share (EPS) are envisioned at 55 cents.
For fiscal 2023, Guess? anticipates revenues to grow by roughly 1.5% (up 9.5% at cc) year over year. The adjusted operating margin is now likely to come at 10% in fiscal 2023. Earlier, the company expected an operating margin of nearly 10.3% in fiscal 2023. Management expects adjusted EPS of $2.65.
3 Hot Stocks
Here we have highlighted three better-ranked stocks, namely BJ's Wholesale Club (BJ - Free Report) , Prestige Consumer Healthcare (PBH - Free Report) and Snap-on Incorporated (SNA - Free Report) .
BJ's Wholesale, a warehouse club operator, currently sports a Zacks Rank #1 (Strong Buy). BJ has an expected EPS growth rate of 9.3% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BJ's Wholesale’s current financial-year revenues and EPS suggests growth of 14.3% and 9.5%, respectively, from the year-ago reported figure. BJ's Wholesale has a trailing four-quarter earnings surprise of 16.5%, on average.
Prestige Consumer, which develops, manufactures, markets, distributes and sells over-the-counter health and personal care products, carries a Zacks Rank #2 (Buy). PBH has an expected EPS growth rate of 8% for three to five years.
The Zacks Consensus Estimate for Prestige Consumer’s current financial-year sales and EPS suggests growth of 3.5% and 3.7%, respectively, from the year-ago period. PBH has a trailing four-quarter earnings surprise of 5.6%, on average.
Snap-on manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions. The stock currently carries a Zacks Rank #2. SNA has an expected EPS growth rate of 7.8% for three to five years.
The Zacks Consensus Estimate for Snap-on’s current financial-year revenues and EPS suggests growth of 4.7% and 8.2%, respectively, from the year-ago reported figure. SNA has a trailing four-quarter earnings surprise of 8.9%, on average.